Many of us know that banks are still lending money to burn coal, oil and gas. So what’s this about using home loans to save the planet?
If you’re a climate activist, don’t let your bank undermine all your good work by investing your money in fossil fuels. Banks get a lot of their money from big-ticket items like your home loan, so it’s worth knowing how they are spending your dosh. We’ve talked about switching to ethical banks, super or pension funds if they’re investing in coal, gas or oil. But we can do more than dump the banks with dirty habits! We can also pick the ones that are helping the environment.
There is a huge difference between not doing harm and doing good. We urgently need banks to get behind renewables so we can limit catastrophic levels of global warming. It’s worth picking a lender that not only refuses to fund fossil fuels, but also supports renewable energy production and other low-carbon development.
There are many things that banks do which you might not be comfortable with. Has your bank hurt their employees or customers before? Are they spending your money on tobacco, gambling, arms or human trafficking?
Where do I start?
To answer these questions, my company, Benevolence Financial Group (BFG), have put together this ethical comparison table. This table assesses the environmental and social impact of 16 popular banks in Australia.
Our ratings are based on the work of Market Forces, which BFG has collated with the findings of the Banking Royal Commission and other resources in the public domain. Each bank is given a score based on their impact on the environment, wider community and staff & customers, then graded accordingly.
If your bank is funding fossil fuels or other ecological destruction; a humanitarian issue (gambling, slavery, arms, tobacco); or, has mistreated their employees or customers, we gave them a frowny face. Dump them!
Not doing/avoiding harm
If your bank has not (or has committed to not) harmed the environment, community or staff, they’re okay but you could do better. We also gave banks this rating if they’ve had a previous scandal, but have since addressed the issue.
This is the one! Your bank is helping the environment, community and clearly treats their customers and employees well. It helps if they’re a mutual bank (owned by customers, not shareholders).
Buying a home is a big deal – for you personally, and for the environment. With an ethical bank like Bank Australia, Teachers Mutual Bank, Adelaide Bank or Beyond Bank, you can rest easy knowing your money is going to the right place.
It’s never too late to walk away from a relationship with a bad bank. If you already have a home loan, it’s not too late to stop your money from funding fossil fuels. In fact, by refinancing your home loan, you can almost certainly get a cheaper deal due to the low interest rates set in response to the economic recession.
Home loans can be a real headache for many of us. It may seem like an awful lot of paperwork, but trust us, you’ll feel better for it. With a cleaner, greener bank, you can check out how many dollars they’re putting towards renewables and other environmental projects, and pat yourself on the back for being part of it.